The Ultimate Guide to Selling at the Home Depot ®
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THE ULTIMATE GUIDE TO SELLING AT THE HOME DEPOT ® Compiled & Published by Askuity The Ultimate Guide to Selling at The Home Depot CONTENTS Foreword: Hitting the Nail On The Head A brief overview of what you’ll learn in this eBook 03 A Closer Look at The Home Depot A closer look at The Home Depot’s customers, products, competitors, and more 04 Chapter 1: Pitching to The Home Depot How to get your product on to The Home Depot’s shelves 07 Chapter 2: Building Your Success At The Home Depot Strategies to help you succeed at The Home Depot 09 Chapter 3: Omnichannel at The Home Depot Exploring The Home Depot’s brick-and-mortar, online, and mobile strategy 14 Chapter 4: How To Succeed at Trade Shows What it takes to be the best at industry specific trade shows 19 Chapter 5: Home Depot Merchant Meetings & Line Reviews Best practices for business and line reviews 21 Final Thoughts Key takeaways from the eBook 25 PAGE 03 The Ultimate Guide to Selling at The Home Depot Hitting the Nail on the Head Foreword With home values on the rise and do-it-yourself projects continuing to gain popularity, the home improvement space is hotter than ever. The Home Depot continues to prosper while many retailers shrink or even collapse. In fact, The Home Depot hasn’t opened any new stores since 2008, with their impressive growth driven by increased traffic and more average spending per customer. The Home Depot should be at the top of every vendor’s wish list when seeking retail distribution in the home improvement space. In fact, it has been said that there are two types of home improvement product vendors: those who sell to The Home Depot and those who want to sell to The Home Depot. Getting listed and remaining on shelf is no easy feat, though. Our team works with leading vendors and consultants across a variety of categories. With their input, this eBook dives deep into the world of The Home Depot. It will equip you with strategies and tips on how to get, stay, and succeed in the world’s largest home improvement retailer. PAGE 04 The Ultimate Guide to Selling at The Home Depot A Closer Look at The Home Depot By The Numbers Today, The Home Depot is the world’s largest home improvement retailer with more than 2,200 stores (1,979 in the U.S. alone) and nearly 400,000 asso- ciates in the U.S., Canada and Mexico. The typical store averages 105,000 square feet of indoor retail space, interconnected with an e-commerce business that offers more than one million products for the do-it-yourself customer, professional contractors, and the industry’s largest installation business for the “Do-It-For-Me” customer. 400,000 105,000 2,274 ASSOCIATES SQ FT AVG. STORES STORE SIZE Product Selection The Home Depot carries over 35,000 products in store and over one million products online. This retailer’s departments span everything from appli- ances to building materials and tools. The Home Depot carries several exclusive and private label brands, including all the brands shown on the left. PAGE 05 The Ultimate Guide to Selling at The Home Depot The Home Depot Customer That being said, Home Depot realizes the fast- est-growing segment in home ownership are millen- To stay on top of the industry, The Home Depot is nials. The retailer sees the younger generation as focusing on a blended strategy, appealing to profes- more interested in do-it-for-me services and as sionals and everyday consumers. Their customer value-conscious. (Source) base can be broken down into three main categories: In summary, the key to Home Depot’s success is • Do-it-yourselfers who buy products and helping professionals do their jobs efficiently and install them in their homes. cost effectively while educating amateur home Do-it-for-me customers that seek Home • remodelers to help them build with confidence. Depot’s own installation or consulting services. (Source) • Professional customers such as contrac- tors, builders, plumbers, painters, and other Competitive Landscape home-improvement experts. The Home Depot faces its stiffest competition from It’s important to note that professional contrac- Lowe’s, another leader in the home improvement tors make up just 3 percent of The Home Depot’s space. Overall, these retailers seem to be more customer base, but generate 40 percent of its similar than different in their customer demo- revenue. (Source) graphic, though the two have very different strate- gies for engaging them. In terms of layout, The Home Depot has more of a warehouse look, which makes it more appealing to professionals and contractors. Lowe’s is less indus- trial in appearance, with stores featuring more elaborate floor displays and themed products such We are focused on being a valued “partner for our Pros by offering solutions both in-store and at the jobsite that help them to more effectively manage their business. This includes enhancing our leadership position in tool rental.” Baby boomers are Home Depot’s most important - Craig Menear, Chairman, CEO & President The Home Depot – Q2 customers, accounting for about half of the retailer’s 2017 Home Depot Earnings Call 08/15/17 revenue. This should not come as a surprise, consid- ering about 40% of US homeowners are boomers, as patio sets and holiday decor items. This makes and they own about half of the total home value in it a less intimidating environment for the average the country. (Source) shopper, as well as female consumers. PAGE 06 The Ultimate Guide to Selling at The Home Depot What’s interesting about the relationship between As you’ll learn throughout this eBook, The Home The Home Depot and Lowe’s is that they’re always at Depot excels at customer service and prides itself on each other’s heels, taking the leading position back always putting the customer first. While some strat- and forth from one another. They also learn from egies may naturally shift over time, this is one thing each other and often iterate on strategies. that will always remain at this retailer’s core. “Big companies like The Home Depot and Lowe’s may seem slow to change, but in reality, they are quite nimble and changing all the time. They are constantly testing very innovative ways to market and sell. They learn from each test and then choose whether or not to adopt the approaches, products and brands that pass those tests.” - Mark Mitchell, Whizard Strategy PAGE 07 The Ultimate Guide to Selling at The Home Depot Chapter 1 Pitching to The Home Depot If you’re already on Depot’s shelves, feel free to the National Hardware Show. The Home Depot and skip ahead to Chapter 2 where we’ll talk about other big-name home and hardware retailers regu- how to succeed at this retailer. larly attend this tradeshow. Showcasing your brand in this show will give you the opportunity to network If you take a look at their corporate website or and showcase your products to HD Merchants. speak with Merchants, you’ll see that innovation is a priority at The Home Depot. It’s built into every part Check out Chapter 4 for tips on how to succeed at of their product selection process. trade shows. The Home Depot has a fairly standardized process “Buying Days” are another great opportunity to for pitching and submitting new products. HomeDe- get exposure to Home Depot Merchants. Buying potLink provides suppliers and business partners Days are special events that offer exclusive face-to- with access to information and systems used for face meetings with retail Merchants and merchan- conducting business with The Home Depot. New dising directors from leading domestic and inter- potential vendors are asked to go through their New national home improvement retailers. They allow Product Submission site. you to introduce your company, products and new merchandising programs, and schedule follow-up That being said, there are other opportunities to get meetings, often at trade shows. These happen your foot in the door. Just like when applying for a on a regional and sometimes store level, and are job, you always want to find a way to get a warm often arranged by outside organizations. Here is an introduction or a direct outreach opportunity, as example from The President’s Council who hosts opposed to simply applying online. buying days in various locations and retailers across A tip that consultant Mark Mitchell wanted to pass North America. along is that you should make an appearance at The best job candidates and vendors are the ones PAGE 08 The Ultimate Guide to Selling at The Home Depot “I love engaging with the Merchants and vendors, meeting people from different indus- tries and seeing how they try to create value in their businesses. But, we all have one thing in common — we want to keep the customer front and center to make sure we are satisfying their needs.” - Ted Decker, EVP of Merchandising at The Home Depot (Source) who find a way to stand out in their approach. To displays. You should repeat this exercise periodi- do that with The Home Depot, you need appeal to cally, given that The Home Depot continuously adds the Merchant’s needs (innovation, margin, sales new products and vendors. velocity, etc.) and show that you’re an expert in your Having done this research, you’ll have a better category, know how you compete, and bring your handle on why you’re unique and what makes your A-game online.